HOT AIR BALLOON FLIGHT

By Julia Horowitz • Friday, July 16

Good morning. In today's newsletter: The deal boom is a global phenomenon. Plus, meme stocks are having a rollercoaster week, and Apple needs to watch out for this Chinese phone maker.

 

US stock futures are higher after the S&P 500 fell 0.3% on Thursday. Markets in Europe struggled to find direction in early trading, while stocks in Asia mostly fell. 

 

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DEAL MONITOR

The deal boom isn't just happening in the United States

 

As the stock market soars to new heights, companies have been racing to issue shares, leveraging the enthusiasm to generate cash for their businesses.

 

But the game isn't just being played on Wall Street.

 

What's happening: This has been a huge week for initial public offerings in India, which has been churning out billion-dollar startups.

 

Digital payments firm Paytm is planning to raise as much as 166 billion rupees ($2.2 billion) in an initial public offering in Mumbai, according to documents filed on Friday. The IPO, which is set to be a record tech listing for the country, would value Paytm at $25 billion, according to Reuters.

 

The news comes just two days after food delivery giant Zomato began raising $1.3 billion from its share sale in Mumbai, my CNN Business colleague Diksha Madhok reports. It was the country's first tech unicorn to go public.

 

Step back: 2021 has produced the best start to the year ever for initial public offerings, according to data from Dealogic. Globally, there have been 1,522 deals worth almost $350 billion.

 

Stock issuers from the United States raised $213 billion on global markets during the first half of 2021. That was up 8% compared with levels seen a year ago, per data from Refinitiv.

 

But the rush to tap markets isn't just benefiting American companies, with US firms accounting for a smaller share of global stock issuance than in 2020.

 

A global phenomenon: Stock offerings from issuers in the Asia-Pacific region hit a record $253 billion during the first half of 2021, an 81% increase compared to 2020, according to Refinitiv.

 

Plenty of the action is still passing through the United States. Chinese ride hailing giant Didi, for example, opted to list its shares on the New York Stock Exchange. 

 

But the flurry of listings in Mumbai could encourage more of the country's unicorns to consider the option. Walmart-owned Flipkart, which is the only Indian tech unicorn to have been acquired at a valuation of more than $1 billion, is also said to be considering a public offering.

 

And as China exerts more control over listings of domestic companies, Shanghai and Hong Kong could see an uptick in deals, too.

VOICES

Washington will warn US firms about work in Hong Kong

"The situation in Hong Kong is deteriorating, and the Chinese government is not keeping its commitment that it made [on] how it would deal with Hong Kong."

 

US PRESIDENT JOE BIDEN

 

Read more from CNN Business.

MARKET FLASH

Meme stocks are having a rollercoaster week

Meme stocks popular online aren't known for their predictability. But shares of GameStop and AMC Entertainment have been noticeably volatile this week, giving whiplash to small investors still among the faithful.

 

The latest: The value of shares of movie theater chain AMC has been cut in half since a record high in early June. Despite rising nearly 8% on Thursday, they're still down 22% this week.

 

Last week, AMC canceled a vote on whether to authorize the sale of 25 million more shares, citing a divide in opinion among its investors.

 

"It's no secret I think shareholders should authorize 25 million more AMC shares. But what YOU think is important to us," CEO Adam Aron tweeted. He added that AMC would not make any more share sale requests for the rest of 2021.

 

GameStop, meanwhile, is off nearly 13% this week. The company, which is trying to execute an ambitious turnaround plan, now has another foe to consider: Netflix, which intends to start offering video games on its platform.

 

Watch this space: Despite lots of uncertainty, amateur investors are staying in the game. Retail investors have been averaging daily stock purchases of $1.3 billion a day since the middle of June, according to Vanda Research. That's 25% more than the post-Covid average. 

 

But the research group notes that meme stocks haven't been driving much of the action.

 

"Since June, a large share of retail purchases has been concentrated in underperforming sectors like financials, energy or reopening," Vanda's Ben Onatibia and Giacomo Pierantoni said in a research note this week.

UP NEXT

Charles Schwab, State Street and Ericsson report results before US markets open.

Also today: US retail sales for June post at 8:30 a.m. ET.

 

Coming next week: Earnings from Netflix, Johnson & Johnson and Intel.

WHAT WE'RE READING AND WATCHING

▸ An 18-year-old is going to space with Jeff Bezos (CNN Business)
▸ Intel is in talks to buy a chipmaker for $30 billion (WSJ)
▸ The UK has a new $33 billion tech giant (CNN Business)
▸ Oatly shares drop 9% after short seller's report (CNN Business)
▸ Oil prices are on track for their worst week since March (Bloomberg)
▸ Tech workers who swore off the Bay Area are coming back (NYT)

FINAL WORD

Apple needs to watch out for this Chinese phone maker

The iPhone may be ubiquitous, but Apple is still playing defense in the global smartphone market.

 

This just in: Xiaomi has overtaken Apple to become the world's second biggest smartphone maker for the first time ever, according to market research firm Canalys.

 

The Chinese company took 17% of worldwide smartphone shipments for the second quarter of 2021, behind Samsung's 19%, Canalys said in a report this week. Compared with the same period in 2020, Xiaomi's shipments jumped more than 80%.

 

Apple ranked third, with shipments that accounted for 14% of the global total. Chinese smartphone makers Oppo and Vivo followed, with 10% each.

 

Xiaomi is celebrating the win, pointing to its global expansion both online and in stores. The company's stock surged nearly 5% in Hong Kong on Friday.

 

Apple and Xiaomi generally target different customers. Compared to Samsung and Apple, Xiaomi's average selling price is around 40% and 75% cheaper, respectively.

 

But the rankings are a reminder that even with nearly $48 billion in iPhone sales during the first three months of the year, Apple has genuine global competition.